Growth in 2013 Arkansas personal income falls below U.S. average

by The City Wire staff ( 5 views 

Combined personal incomes in Arkansas during 2013 grew 2.2%, below the 2.6% U.S. average, with the state’s per capita average of $36,086 pushing the state’s national ranking from 45 in 2012 to 46 in 2013.

The U.S. Bureau of Economic Analysis on Tuesday (March 26) reported preliminary estimates that showed overall U.S. personal income growth of 2.6% in 2013 was down from the 4.2% growth in 2012. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 1.1% in 2013 from 1.8% in 2012.

“The slower personal income growth reflected the effects of several special factors including the expiration at the beginning of 2013 of the ‘payroll tax holiday’ (a temporary two-percentage point reduction in the personal contribution rate for social security) and the acceleration of the receipt of income, especially personal dividends and salary bonuses, into 2012 in anticipation of changes in individual income tax rates for 2013,” noted the BEA report.

Earnings grew in 2013 in every industry except civilian federal government, which fell $6.7 billion. Earnings growth slowed, however, in most private-sector industries in 2013. Among the few exceptions with accelerating growth, construction and farming were notable. Earnings growth was greatest in professional services (up $44.6 billion), construction (up $44.3 billion), and health care (up $42.5 billion). These 3 industries contributed the most to earnings growth in 2012 as well.

Mining (including oil and gas extraction) was one of the major contributors to earnings growth in North Dakota, Oklahoma and Texas in 2013. Earnings growth rates in these three states have outpaced the national average not only in 2013, but in each of the four years since the recession.

Personal income, according to the BEA, is the sum of net earnings by place of residence, property income, and personal current transfer receipts.

Arkansas’ personal income in 2013 totaled $106.792 billion, up 2.2% from 104.508 billion in 2012. Oklahoma saw personal income growth grow 3.3% in 2013 to reach $160.128 billion. Personal income growth in Missouri during 2013 totaled $241.145 billion, up 2.3%.

Of the 2.2% growth in Arkansas, 1.4% growth was reported in net earnings (typically income from a job) and a 2.9% increase in income from dividends, interest and rent. Income from transfer receipts – payments to Arkansans from federal sources, for example, Medicaid and Medicare – rose 3.5% in 2013.

Earnings growth in Arkansas was up $1.977 billion in 2013 compared to 2012. Following is a breakdown on earnings gains and losses compared to 2012 in key Arkansas economic sectors.
• Management of companies: up $469 million
• Farming: up $321 million
• Healthcare and social care: up $275 million
• Retail trade: up $116 million
• Utilities: up $102 million
• Transportation: up $87 million
• Finance and insurance: up $51 million
• Real estate: up $27 million
• Non-durable goods manufacturing: up $20 million
• Durable goods manufacturing: up $7 million
• Mining: down $45 million
• Construction: down $51 million

Arkansas’ per capita personal income of $36,086 ranked 46th. West Virginia ranked 47, South Carolina ranked 48, Idaho was at 49, and with an average per capita income of $34,478, Mississippi ranked last.

The top five were:
Connecticut: $60,847
North Dakota: $57,084
Massachusetts: $56,923
New Jersey: $55,993
Maryland: $54,259